Medistim ASA (MEDI: NO)
12-month performance: +33%
Insider activity: Bearish
Selling pattern: Sales from CEO and CFO
Recent news: Good Q1 results
Medistim is a Norwegian company that is engaged in the provision of medical equipment and technology. Its mission is to serve patients, surgeons and healthcare providers with innovative and cost-effective medical devices that measure blood flow, and help to improve the quality and outcome of cardiac and vascular surgery. The company is listed on the Oslo Stock Exchange and currently has a market capitalisation of NOK 3.0 billion.
Medistim recently issued an excellent set of first-quarter results. For the quarter, sales came in at a record NOK 103.1 million, up 16% on the same period last year, while operating profit (EBIT) came in at NOK 24.8 million, up 24% on last year. The main driver of the strong results was the rapid uptake of the company’s MiraQ platform in Japan, which resulted in 175% growth in Asia. Sales were also strong across Europe with growth of 30% registered in this region.
Source: 2iQ Research
While Medistim’s results indicate that the company has momentum at present, we think caution is warranted towards the stock at the moment. We say this because the stock has enjoyed a strong run since the beginning of the last year – rising approximately 140% – and insiders have recently been offloading stock. Indeed, between 29 April and 4 May, both CEO Kari Krogstad and CFO Thomas Jakobsen disposed of shares, selling a total of around NOK 11 million (approx USD $1.1 million) worth of stock, while in early March, Chairman Oyvin Broymer offloaded NOK 297 million (approx USD $32 million) worth of shares. This selling pattern suggests that insiders believe the stock is overvalued. On top of this, short interest has surged recently which is another bearish signal. All things considered, we think there’s risk to the downside here.